Yet despite the accelerated cost, the value of a college degree has been diminishing, both in the terms of quality of education received and future employment prospects.

In his new book, The Nearly Free University, Charles Hugh Smith takes a critical look at the state of education in the developed world and claims that it is ripe for creative disruption. There are new models and new enabling technologies that promise to deliver more effective learning at much lower cost, but they challenge a very entrenched establishment, meaning that the system will likely fight these innovations.

On the Failings of the Current Education Model

I think that the system has reached diminishing returns. It's a "factory model" in the sense that you take a standard course of material and you give it to hundreds or thousands of people. If fifty people come in to hear the lecture, they read the same textbook, they take the same test, they move on, and another fifty people take their place, it is very much an assembly-line approach to education. As the costs have skyrocketed, the effectiveness of what we are learning in that assembly-line educational model is no longer paying dividends in the real economy. Statistically, half of all recent college graduates have either no job at all or they are severely underemployed. This speaks to an enormous disconnect from the higher education system and the economy that it is supposed to be serving.

The numbers are something like this: credit card debt for the entire United States is something like $760 billion; auto loans are roughly the same thing, $700 billion or so. We have a student loan debt of over $1 trillion. A and what is really astonishing is that the federal government has taken over issuing – not just guaranteeing – but they own these loans. I am looking right now at a St. Louis Federal Reserve chart which shows that the federal government’s ownership of student loans went from a $100 million in 2009 to $550 million today. In other words, it has skyrocketed as the federal government has basically taken over about a half a trillion dollars in student debt. They are issuing it and demanding it and demanding payment on it.

You have to ask, how is it that the federal government is issuing half a trillion dollars in new student debt or taking over old debt within a few years? What is the payoff for our society of saddling college students with a trillion dollars in debt? On the other side of the payoff – in other words, the return on investment, as you mentioned – a huge study, one of the few that has actually tracked the results of a college education – like, how much do people learn in getting a four-year degree? – it is called "academically adrift." It found roughly a third of all college graduates had no increase in critical thinking skills. Another third had marginal improvements in the kinds of skills that we would consider critical in what I call the emerging economy, the parts of the economy that are actually growing and expanding instead of shriveling and fading.

On the Ripe Potential for Creative Disruption

My motivation for writing the book was to question what kind of system would we have if we could start from scratch in terms of higher education. I think that given the advances in digital technology, the answer is really clear. We would take a curriculum based on what is called MOOCs, massively open online courses, where the very best lecturers are recorded and their lectures are made available for free. Combine that with what I call 'YouTube University', where people have posted a tremendous number, thousands of little lessons on academic and practical bits alike. The core idea in YouTube University is, if you want to solve a particular kind of equation, then you can go and find a lesson that is three or four minutes long, and it shows you how to solve that one equation.

It turns out that there are academic studies on how people learn, and this constant feedback where you take one lesson, you solve it yourself, and you move on actually leads to more learning than sitting and watching a sixty-minute lecture. The point here is that the innovations that actually increase learning are available digitally now for basically free. Why should an education that is available for free cost $100,000?

I call it “accredit the student, not the school.” The basic idea is, in a profession such as architecture or law, in most states at least, just getting a degree does not mean that you can go out and practice. Because it is understood that you may not have learned enough or not learned the right stuff or not have the grasp of the material needed to actually go practice your profession, so you have to take a test. Once you pass this test, which is rigorous, then you are stamped “architect,” “attorney,” and so on, and you can go practice your trade.

Why can’t we apply this model to everything? In other words, if you get a degree in computer science and it is understood you should know something about network security, then you would pass a test that can be done online with encryption and various things. Or it could be proctored by a real person in a classroom and you pay a hundred bucks and you take the test. But you could be tested for the actual working knowledge that you are supposed to have, and if you pass the test, then you are accredited, you earn that degree. It could work in philosophy as well as computer science or biology; it could work in anything.

That eliminates this artificial scarcity of credentials. In other words, anybody could study on their own and take the test and be granted the accreditation.

Click the play button below to listen to my interview with Charles Hugh Smith (47m:16s):

Adam Taggart: Hello, and welcome to the Resilient Life Podcast. Resilient Life is part of PeakProsperity.com. It is where we focus on practical and actionable knowledge for building a better future. I am your host, Adam Taggart, and today’s guest is someone that the Peak Prosperity audience knows well, Charles Hugh Smith.

In addition to being proprietor of the excellent weblog oftwominds.com and a regular contributor to Peak Prosperity, Charles is prolific author. I have asked him to join me today to discuss his latest book, just released a few days ago, titled The Nearly Free University. The cost of higher education has skyrocketed in recent decades. The average cost of tuition is up over 1,000% since the 1980s, far outstripping price inflation and most other goods and services. Yet despite the accelerated cost, the value of a college degree has been diminishing, both in the terms of quality of education received, as well as future employment prospects. In his new book, Charles takes a critical look at the state of education in the developed world and claims that it is ripe for disruption. There are new models and new enabling technologies that promise to deliver more effective learning at much lower cost, but they challenge a very entrenched establishment, meaning that the system will likely fight these innovations.

Charles, this is a fascinating and important topic that has direct bearing on our future prosperity in society. Thank you for joining us today to share your insights from your recent work and helping us make sense of the opportunities and challenges here.

Charles Hugh Smith: Thank you, Adam. Glad to be here.

Adam Taggart: Let us start at the beginning. Where did our current education system go astray, and what sparked you to write this book now?

Charles Hugh Smith: I think that the education system went astray in becoming disconnected from the economy. Here is how I would describe the back-story of that. The current higher-education system of colleges and universities arose in the World War II era as a centralized command economy outgrowth of the war effort. The United States increased war production to an incredible degree and needed a level of science and technology that was new. In other words, the atomic bomb, and just the level of production, and a huge number of people with some sort of science and technology backgrounds were needed to win the war.

In the post-war era, then, all that brainpower in technology and science was applied to not just the military but to consumer goods and computers and so on. That model worked extremely well in the sort of industrial golden age of the 1950s and early 1960s. The model started to go astray when the economy started changing in the 1970s and the 1980s, while the old factory model of education continued on accreting costs and overhead. That is how I would describe the back-story, where we went astray with this model of education.

Adam Taggart: So what about the situation has raised things to the point where you felt the need to publish this book?

Charles Hugh Smith: Adam, I think that the system has reached diminishing returns, is how I would describe it, that it has just become so obvious that the current system – which I call a factory model in the sense that you take a standard course of material and you give it two hundreds or thousands of people in a sort of factory model. If fifty people come in here to hear the lecture, they read the same textbook, they take the same test, they move on, and another fifty people take their place, it is very much an assembly-line approach to education. As the costs have skyrocketed, the effectiveness of what we are learning in that assembly-line educational model – it is no longer paying dividends in the real economy. Statistically, half of all recent college graduates have either no job at all or they are severely underemployed. This speaks to an enormous disconnect from the higher education system and the economy that it is supposed to be serving.

Adam Taggart: It is raising a lot of questions for me. First, let us zero in on the cost aspect. On Peak Prosperity, both Chris and I have been pretty vocal about our estimation of the increasingly poor ROI (return on investment) that a college degree offers the average student these days, given the high cost, as you mentioned here, and in the declining returns on education that is being provided. I believe there is data out there that suggests that we are actually not graduating students that are as well informed as we have in the past. In some ways, the quality of education is suspect as well. You have these high and rising costs, you have these deteriorating standards, you have these weak job markets that you mentioned earlier on. You also have an increase in cost of living. Much of what we talk about here on Peak Prosperity is that basic living costs are going to get more expensive as time goes on.

We also talked, you and I, a lot recently about the fact that interest rates look like they are back on a secular rise. It really does seem to me that we are graduating a generation of debt slaves at this point in time. If you take out tens of thousands of dollars in student loans – it is not that uncommon to get close to $100,000 in student loans – and you are fortunate enough to get a job, and you make the average income, and you do all the things people do, like buy a house and get married and start a family and all that, a lot of these folks, today’s current graduates, are going to be paying off their student loans for undergraduate until the time their own children go to college, at this rate.

How bad is it? I know you are a lot closer to these numbers than I am. Have we gotten to that part where we are creating a generation of debt slaves here?

Charles Hugh Smith: I think so, Adam. The numbers are something like this: credit card debt for the entire United States is something like $760 billion; auto loans are roughly the same thing, $700 billion or so. We have a student loan debt of over $1 trillion, and what is really astonishing is that the federal government has taken over issuing – not just guaranteeing – but they own these loans. I am looking right now at a St. Louis Federal Reserve chart which shows that the federal government’s ownership of student loans went from a $100 million in 2009 to $550 million today. In other words, it has skyrocketed as the federal government has basically taken over about a half a trillion dollars in student debt. They are issuing it and demanding it and demanding payment on it.

You have to ask, how is it that the federal government is issuing half a trillion dollars in new student debt or taking over old debt within a few years? What is the payoff for our society of saddling college students with a trillion dollars in debt? On the other side of the payoff – in other words, the return on investment, as you mentioned – a huge study, one of the few that has actually tracked the results of a college education – like, how much do people learn in getting a four-year degree – it is called academically adrift. It found roughly a third of all college graduates had no increase in critical thinking skills. Another third had marginal improvements in the kinds of skills that we would consider critical in what I call the emerging economy, the parts of the economy that are actually growing and expanding instead of shriveling and fading.

Adam Taggart: That really is sobering. Help me understand two things. The first is, I have heard – and I cannot actually say if I know for certain that this is accurate or not, so I look for you to clarify here for me – I have heard that student loans or education loans are one of the very few forms of debt that cannot be dismissed in bankruptcy. Is that true?

Charles Hugh Smith: In general, it is true. When I have repeated that online, I have had some people come back to me with outlier arguments where there have been a few law students who have gone through like seven different courts and seven appeals and gone through enormous expense and trouble and they have managed to get out from underneath it. In terms of an average person pursuing getting out from that via bankruptcy, no, it is not possible.

Adam Taggart: Okay.

Charles Hugh Smith: So you have to jump through an awful lot of hoops that are beyond the average person unless you happen to be an unemployed attorney.

Adam Taggart: Or an attorney with really deep pockets, who for some reason took out loans and wants to go and fight this fight. Unless you are that person, you are basically stuck with having to pay these loans back for the rest of your life until they are paid off. True?

Charles Hugh Smith: Yeah, I think that at the current point in time that is relatively true. What people can do, of course, is simply default – in other words, stop paying – but then there is a lot of negative consequences to that. I think the really important point here, and maybe this is the primary motivation for me writing the book, was, this is really unjust. There is a sense of wrongness to this whole scheme in which students are being told you must have a four-year college degree to get a steady, good-paying job. But it is a cartel system in which there are only a few places that you can get a degree that is useful, so you are going to have to pay through the nose to get that. It is going to cost you $100,000 or $150,000, and you can cobble together some cash and grants and so on and so forth, but ultimately you are going to be in debt for that.

Then, when you get that degree – and even one in biology or computer science or something that you were told was going to get you a reliable, steady, good job – it turns out to be false, because you did not really learn anything that employers want and need. Then you have to go through this whole process of learning what you really need to get a job, and that is after you have graduated from college.

Adam Taggart: Right, and that is usually doing so at very low pay because you are sort of being trained up in those early positions.

Charles Hugh Smith: Yeah, and so I guess my motivation for writing the book was to question what kind of system would we have if we could start from scratch in terms of higher education. I think that given the advances in digital technology, the answer is really clear. We would take a curriculum based on what is called MOOCs, massively open online courses, where the very best lecturers are recorded and their lectures are made available for free. Combine that with what I call YouTube University, where people have posted a tremendous number, thousands of little lessons on academic and practical bits alike. The core idea in YouTube University is, if you want to solve a particular kind of equation, then you can go and find a lesson that is three or four minutes long, and it shows you how to solve that one equation.

It turns out that there are academic studies on how people learn, and this constant feedback where you take one lesson, you solve it yourself, and you move on actually leads to more learning than sitting and watching a sixty-minute lecture. The point here is that the innovations that actually increase learning are available digitally now for basically free. Why should an education that is available for free cost $100,000?

Adam Taggart: Great. Well, let us jump right into this, then. I do want to return to the cabal topic before we finish up here today, because there are a few additional questions I have there for you, but this really is the meat of what I wanted to talk to you about. Let us really talk about these new models that are either being made possible by new technologies or just by new thinking. I love your concept there of just saying look, what if we just start from scratch? If we could really design an education system today, without the constraints of the prior system, how do we build it? I would love to hear more from you in terms of what you see as the most notable models that are out there.

You already mentioned the MOOCs and some of these new sort of progressive ways of learning like YouTube University. You also mentioned to me in conversations about this mentality or this model shift of accrediting an institution that you graduate from with a piece of paper that says you went to this institution and therefore all sorts of assumptions about your level of education should be conferred on you and shifting that to an accreditation of the individual, where the individual has a certain number of academic awards or certificates of proficiency or whatever it is. That really becomes the model, where it is really student-centric versus institution-centric. Please, you have spent a year writing this book, enlighten us about what are the things we should be paying attention to right now.

Charles Hugh Smith: Adam, I think the one you just mentioned is key, and I call it “accredit the student, not the school.” The basic idea is, in a profession such as architecture or law, in most states at least, just getting a degree does not mean that you can go out and practice. Because it is understood that you may not have learned enough or not learned the right stuff or not have the grasp of the material needed to actually go practice your profession, so you have to take a test. Once you pass this test, which is rigorous, then you are stamped “architect,” “attorney,” and so on, and you can go practice your trade.

Why can’t we apply this model to everything? In other words, if you get a degree in computer science and it is understood you should know something about network security, then you would pass a test that can be done online with encryption and various things. Or it could be proctored by a real person in a classroom and you pay a hundred bucks and you take the test. But you could be tested for the actual working knowledge that you are supposed to have, and if you pass the test, then you are accredited, you earn that degree. It could work in philosophy as well as computer science or biology; it could work in anything.

That eliminates this artificial scarcity of credentials. In other words, anybody could study on their own and take the test and be granted the accreditation. Of course, this was standard back in the day of, say, Abraham Lincoln, that he studied the law on his own and then he passed whatever hoops that were in place at that time and became an attorney. That idea takes away the power of accreditation from an institution which has a self-interest in scarcity, in keeping that credential scarce, to a system that would give everybody a college degree if they earned it.

Adam Taggart: I really like that. I guess one question is, is there anybody out there moving towards this yet?

Charles Hugh Smith: We are at the very early stages of this revolution in higher education. There are a few experiments here and there. There are established campuses which are establishing huge digital education departments that are trying to set up systems for giving credit for experience and this kind of thing, which are the first steps toward what I am suggesting.

But there are three other steps which I think are key to this whole model of what I call the Nearly Free University. Second one is, structure learning so that it no longer depends on large physical campuses and costly administration. That is part of why people ask, why has education gotten so expensive? Well, it used to be that there were four professors or instructors for each administrative person, and now in many places it is 1:1. If you have an Under-Assistant Secretary to the Assistant Dean drawing $150,000 a year, and you actually have professors being cut or the number of tenured positions being slashed because of the budgets absorbed by administration in the digital world – all this could be automated. Absolutely it could all be automated. People sign up for a class, they are given their tests, they pass or fail the test, it is all done digitally, and they are issued their credential online. It is like there is no need for a costly administration, or, in fact, a large campus that requires tens of millions of dollars to maintain.

The third point is, I think the curriculum needs to be tailored to the real-world emerging economy. This is where the current system has completely failed, that it is sort of assumed that your Bachelor’s degree or your Master’s magically confers the abilities that employers actually want. I think that is becoming less and less true.

The fourth point is eliminating the artificial scarcity of admissions and accreditation. We now go through this dance where smart kids apply to ten colleges and, of course, there is often a several-hundred-dollar fee to apply. Then, one in ten kids is admitted, and this whole dance of scarcity and the way it is being distributed is via this elite. Wherein the Nearly Free University model anybody can take a class from MIT or wherever, as long as it is digital, and if they master the material then they are issued a credential. There is no scarcity in tier admissions or accreditation.

Adam Taggart: Okay, so that raises obvious questions about howdo the existing institutions react to this? Obviously there is part of it that I am hoping at least excites them in terms of ways to better deliver upon their missions. I have to think, especially the way in which this sort of cabal structure has evolved, as you mentioned, this comes as a real threat. I can certainly understand if indeed they are not embracing some of these technologies with open arms. What are you seeing out there?

Charles Hugh Smith: I think that the large universities are well aware that they need to connect their product – i.e., the education and their diplomas – to some real-world value in the job market. You see a lot of universities that have entrepreneurial programs where they try to line up students with entrepreneurial programs or incubators and that kind of thing. That is one way they are trying to respond, is not lowering their costs. They are saying, well, if you come here and give us $150,000, we are going to turn you into a real live entrepreneur because we have this program that after you have given us $150,000, you get two hours with somebody from an incubator. I mean, I know I am sounding rather harsh, but I think there is very little evidence that I have been able to find that entrepreneurship is being developed throughout a four-year curriculum. It is sort of being tacked on after you sat through a bunch of passive lectures on being an entrepreneur.

Adam Taggart: Yeah.

Charles Hugh Smith: So I think that the emerging economy is all about having the value system and the skillset of being an entrepreneur, not in having a particular knowledge in computer science or biology or whatever anybody thinks is the key to the future economy. It is like, if you have the skillset to know how to learn and to be an entrepreneur and find value, create value, work with other people to create value, these skills, you can build a livelihood irrespective of your degree; frankly, your initial experience.

Adam Taggart: Right, that gets us to a question that I was planning to ask later, but in this new emerging economy, you refer to particularly where you might be able to pick up expertise and skills more organically than going through just an official four-year program. Do you really need a degree? Do degrees become less relevant? Does basically just “defined mastery” in certain areas just matter?

Charles Hugh Smith: That is an excellent question, and part of my response will be that one of the head honchos in Google was interviewed, I think by the New York Times, and he confessed that they used to seek out potential employees who had done well within academia, that they got straight A’s or whatever. He said they did a data crunch on that, and they found that there was no correlation between doing well in academia and being a productive employee of Google. In response, they have really diminished that their weighting of academic success, and in fact, he said in some divisions of Google, a number of people with no college experience – not just no college degree; no college experience whatsoever – is roughly 15% of their project workforce. I think this is indicative of a trend that I call what people are seeking from you is what you can accomplish and do on your own in the real world, not what stamps you have picked up on your academic passport.

Adam Taggart: I can talk about this from a personal perspective on two fronts. Certainly, in my professional experience I have seen that. I went to Brown University for undergraduate and went to Stanford for business school, so I have gone to some fairly well known and storied academic institutions. I have found firsthand that you can definitely spend a lot of money and go to a top-notch educational institution and still get out of there with very little new learning in your mind to show for it. I like to think I paid attention and got something out of my investment. Certainly not as much as I had personally expected to, and I certainly saw lots of people there who – it was really money down the drain for them professionally.

I have seen that in most cases, what that piece of paper does, that diploma does for you is, it gets you in the door in terms of the interview process during the initial recruiting phase right after graduation. But very, very quickly, I would say within less than twelve months, it really, in terms of what your employer is looking at, is really all about your experience versus your pedigree. I actually found, both in Wall Street and in Silicon Valley, that the higher up you progressed inside an organization – some of these large companies I worked for are Merrill Lynch and Yahoo, etc. – the higher up you went in the company, the fewer and fewer of the Ivy League degrees you saw and the more degrees you saw from any kind of school or at least a much more wide variety of schools. That is because these were the people who had a true passion for what they were doing, they were scrappy, and they just put their nose to the grindstone and did it. I have certainly observed that myself in my professional career.

Secondly, your story about Google makes me smile, because I did recruit with Google a couple of times where they had come and talked to me when I was working, both before and during Yahoo. Not only did they look at my business school experience, but they wanted my transcript – not just from my college, but from my high school. It just seemed like there was a ridiculous focus there on what the institutionalized measurements of your academic success were. It really did seem at the time like it was a misallocation of focus. It is interesting and somewhat gratifying to see that they have walked away from that now.

Charles Hugh Smith: Yeah, based on the data, there is no connection between academic success and being a productive employee. Adam, another thing that sparked me to write the book and to investigate the idea what would we have if we started from scratch? was the critical role of values in the emerging economy. In the good old days of the factory model, and I mean both the factory model in education and the factory model of production, you could get a degree in underwater basket weaving – or in my case, philosophy – and then you go work for an insurance company or some white-collar job in which whatever you were supposed to learn they would teach you on the job. So your degree literally was sort of like a stamp on a passport; you were not claiming to know anything of value to that business.

Well, that worldview and that economy is dying. The idea that you can just show up and an employer is going to lavish a bunch of on-the-job training, that is no longer efficient for the employer. They want somebody that can produce value on Day One. We need to create and teach the value system that is needed in the real economy, and values, of course, are not taught at college at all. It is like this strange magic is supposed to occur that if you finish your degree in biology or computer science that you will magically know how to collaborate effectively with people. That you will have an entrepreneurial spirit, that you will understand the mechanics of creating value.

We do not teach any of these things, and so why do we think people will know them when they exit college, even the finest colleges? Of course, we have to make a mention here, you are speaking about the very top 1% of universities. What we are really talking about is what is going to happen to the 90% of colleges that are not Ivy League, not huge graduate research schools like U.C. Berkeley or University of Illinois. What is going to happen to all of those sort of diploma mills? Well, they are going to go away.

Adam Taggart: Yep. Very true, and you and I have talked about this in relation to the book I wrote on how to find your authentic career. Where, very similarly, we talk about that expectation where even though we never talk about or never teach people about how to identify their own unique strengths, attributes, passions, etc. and map those to professional paths, we have this narrative in our head that somehow, by the time you get that degree from a university, you will have it magically all figured out. Even though at no point during the sixteen-plus years of your formal education you have ever had a semester that is focused on helping you actually identify what to do with your life.

I agree with you, and this goes back to your earlier point about how we are really selling a bad bill of goods to the younger generation with the current model, as we talked about. We are selling them an increasingly expensive solution that just does not work anymore. We have not mentioned other factors that are going on here, where industry is becoming increasingly automated so there are fewer and fewer jobs, especially entry-level jobs, because those are the jobs that are most easily going to be replaced by a robot or by artificial intelligence. The outsourcing trend is still going on with globalization, so there is increased competition with workers in other countries.

Because the economy is doing poorly, and we believe that economic growth, slow economic growth at best, is here to stay, you also have intergenerational competition, where the older more experienced workers are not retiring from the system the way that they were. They are basically blocking new talent from coming in. You mention that, basically, training and development is a cost to corporations, and corporations are becoming increasingly focused on profitability and maintaining the bottom line. That is really kind of a perfect storm of really big powerful forces that are working in opposition to the interests of new graduates. It is very sad for them and it is very sad for us as a society when we are not, whether it is on the corporate side or the educational side or wherever, providing a pathway for young people to develop skills that have real value and create societal value. We are beginning to see examples in Japan, for sure, for the last generation or two now, it sounds like. We are seeing it in Europe, as well, where we are really breeding these lost generations, and I fear we are doing a similar one here in the States.

Charles Hugh Smith: Absolutely. I think we can say that at least in certain parts of Europe, there are too many universities and not enough people that are willing or able to pay for the product. Because once you start doubting that the product is going to help you get a job, then you go, why should I scrape up the money? – even in Europe, where education is largely subsidized.

The other point that I want to make here is, so how do you get a job in the emerging economy, the part of the economy that is growing, if a college degree is not enough? My answer is mastery, and that is the other thing that has been lost in our higher education – that mastery means that you know a subject, a technique and skill set, well enough that you can go out there and create value more or less on Day One.

Adam Taggart: I think that is excellent, Charles. Just as you deepen on this, in your book you talk about distinguishing among work, learning, and mastery, and I am hoping that maybe you can elaborate a little bit more broadly on all three here.

Charles Hugh Smith: Yes, I will try. I think that the model that is a good touchstone is the old apprentice/master model that you find in cultures like Japan in the East and also in the European tradition. Where a young student is taken on by a mentor, master, and they have sort of a long apprenticeship to really learn the whole trade or the whole business, the nuts and bolts, often spending years doing what we would call grunt work, that you are doing the repetitive part of the business to really master the fundamentals. Then once you have mastered that trade, that set of knowledge, then you are able to create value.

That, I think, is still a key way to understand how to create value in the economy, whether it is traditional, like learning how to weld so you can go create value in the real world by welding something that had been broken, or if you are going to be creating digital software that creates value for some business by cutting costs and improving products. Whatever your field, if you really understand it and really know it and you are able to collaborate with other people effectively like you have learned these skills and values, then you are going to get a job or you are going to create your own.

That whole process is not passive; it is not sitting in a classroom, either watching a dull lecturer or watching a MOOC, a massively online course, sitting there passively. You really have to be engaged. For me, I think that there is a need for the workshop model within what I call the Nearly Free University.

Now, it was not just enough to sit there passively and watch lectures and take exams; to master something you are going to have to be engaged in the process of problem solving, and that usually requires mentoring by a real person. I do not foresee a future in which everybody is just getting their degree by sitting in front of a computer for 1600 hours or whatever. It is definitely, you have to engage the real economy, and that means learning something to mastery under some mentoring by people who actually work in the real economy.

Adam Taggart: I know this is not necessarily in your book, but it sounds like you are describing a model here where perhaps instead of dropping a lot of money to go sit in university classroom for four years that you would maybe contract with an organization, company, whatever, or an individual expert, and say, look, let me come work with you. It might be for little or no cost. Maybe you are simply paying your living expenses instead of paying tuition, but you are actually there as an apprentice; you are getting real hands-on work experience. I mean, I would assume you would probably up spending less than university tuition, at least all-in university costs. But even if you were [spending] the same, it is a model where at the completion of the process, you have mastery, versus a lot of book knowledge in your head. Is that a fair way to characterize at least one of the models you are alluding to here?

Charles Hugh Smith: Yes, I think so, and it is not that book learning or sitting through lectures is excluded; that stuff is now free. Anybody can pursue that stuff, and you can acquire as much of that knowledge as you have time and interest in. What we are really talking about is everything that you have to learn beyond that passive-lecture, book-testing knowledge in order to be productive in the real world and become an employee or create your own job. That is more along the lines of building social and human capital, as opposed to learning a particular knowledge set, which if history is any example will be obsolete within a few years anyway.

Adam Taggart: Charles, I am so excited about the content of this discussion, because as I talked about earlier, it is such an important issue for us to really figure out for the future of our society. But also because so much of what you talk about really resonates with my own personal observations in both the academic and corporate world. I have two daughters. I think a lot about whether college or at least the traditional college path is the right one for them. I am sure if my parents heard me state so publicly, they would be rolling over in their graves if they were dead, but fortunately, they are very much alive. I know there are a lot of other people who are listening to this who probably have children that are approaching college age. There might even be some listeners to this podcast who are in their teens and thinking about choices to make in their own education.

For those that are really intrigued by what you have been talking about here today, in addition, of course, to reading your own book, how do we encourage them to learn more about these new models?

Charles Hugh Smith: That is a tough question, actually, because there is a lot of ferment in this field, but very few programs that issue the kind of accreditation equivalent of a diploma. In this juncture, where the old system is still holding sway and the new one is developing very quickly but usually as an outlier, then my suggestion is have two approaches to your livelihood and finding your career and path in life. Go ahead and take classes as cheaply as possible – the community college; the state universities. The state universities are adding these MOOC courses as well. Get as many credits as you can as cheaply as you can, and go ahead and do that and pursue whatever degree you think you need as a passport to the job interview you want.

Also, at the same time, pursue these other avenues of learning – pursue mastery, pursue social and human capital, and pursue having the value system that is necessary in today’s economy. That is a big workload; that is a big challenge for young people. I do not really think there is any other way to move forward except to get more or less two degrees – the one that you are learning from experience and aiming at mastery, and then the passive standard factory-model college diploma that you get for earning 120 credits.

Adam Taggart: Right, right and while maybe it sounds a little discouraging that you are essentially going to have to do double duty here while society is in this middle ground of transition trying to figure out where we are headed, certainly investing in opportunities that help you develop mastery are always going to benefit you down the road. It is not like that is going to be an investment that you feel did not pay off for you.

Charles Hugh Smith: No, it will probably be the time you spend sitting in classrooms or watching online courses that you question the validity of, but it is certainly possible. I will end on this positive note. Basically, this is what I did. Now, I did it in the 1970s, which seems like ancient history. The college experience is literally unchanged. I do not think it is much different from 1970 to 1950, frankly. The whole academic setup is virtually unchanged for the last fifty-plus years. While I was sitting in classrooms and earning credits, I was also working for a contractor and learning a half dozen trade-craft skills. When I got my B.A., I also was a carpenter/painter/concrete finisher, etc. I did have to work a lot, but so what; it is better than wasting your life playing video games.

Adam Taggart: Well put. Hey, I have two quick questions for you as we close here. The first, as I mentioned earlier, I did want to briefly return you to the cabal structure of the current educational model. This is just another question that I wanted to get your clarification on. I have also heard that, as I understand it, because you mentioned earlier the government is assuming so much of the education debt that is out there, and the debt that government does not assume, I believe it is private lenders that are assuming colleges really do not have any exposure to your ability or inability to pay back your college loans, your university loans. Therefore, they actually have a broken economic incentive – broken is probably the wrong word – but an economic incentive that is not in the interest of the student, basically, to increase fees up to the point at which the market will bear. Is that true?

Charles Hugh Smith: I think it is absolutely true. That is the mechanism by which tuition has gone up a thousand percent since 1980. People complain about healthcare; well, healthcare only went up 600% in that timeframe, and that is adjusted for inflation, by the way; that is on top of inflation. You can never have these kinds of enormous increase in expenses and tuition fees if there was not basically a spigot of endless money that someone could borrow in order to pay your fees.

You are absolutely right; the schools have no incentive to disband or the student loan system. They will all die on the vine if that system implodes, but we already know it will implode because the trajectory of growth of student loans is unsustainable. Something is going to break in the system. Either the defaults will rise above the current 13%, or the government will have to declare a debt holiday. You are right, the schools have no incentive to question the student loan system.

In terms of the cartel or the cabal system, it just boils down to controlling the accreditation, the issuance of diplomas, and as long as you control that and limit that, then you create what we call a scarcity value. You can charge a lot of money because there are only a few slots that you have arranged to be open. Whereas in the Nearly Free University model, anybody can attend the school, in a sense of study the material and take the courses, so anybody can earn the degree or diploma as well. There is no scarcity value left once you accredit the student instead of the institution.

Adam Taggart: Right, and I think a big part of the appeal of those new models is, the incentives seem much more aligned with the interest of the students. That is why I wanted to bring all this up, which is, if you are a parent and you are thinking about what path to help your child decide to go down, you just want to make sure you are making an eyes-wide-open decision with all the facts about how the game is currently structured.

When you take into account the misalignment of incentives that we just talked about here, as well as something that Charles mentioned earlier, which is, there is no metric that colleges are held to that measures the success of their graduates – most of their metrics are matriculation rates, graduation rates, things like that. There is no easy way to say well, graduates from this school make sixty percent more than the graduates of this school, or sixty percent are more satisfied with their lives, or sixty percent are more fulfilled by their jobs.

As Charles says, they are controlling this accreditation branding, if you will, and it is a perceived value that I personally think – and certainly, Charles has helped me continue to feel even more so this way – that it is a false value or an overinflated value. When you are looking at the exceptional cost of education, or at least traditional education nowadays, and the benefits that students get in return, there are some very high risks. Now, we talked a lot about the economic risks, where students can end up really big debt serfs or at the very least wasting a number of years of their lives and feeling that they do not really have new marketable knowledge or skills as a result of their time through education. I am just making sure that, or underscoring the fact that, increasingly, we really need to weigh all the models out there, the old and the new, so that as we send our children off into their futures, we are not saddling them; we are instead putting wind at their backs.

With that, Charles, thank you so much for your time. My last question for you is, where is your new book available?

Charles Hugh Smith: It is available on Amazon.com as a digital e-book, a Kindle book that you can open on any digital device once you download the free Kindle reader, or as a print book via Amazon.

Adam Taggart: Fantastic. We will have a prominent link to that book that accompanies this podcast. Charles, I want to thank you again for another wonderful interview, but particularly for the time and energy that you put into shedding a lot of light not just in the problem definition but really much more so on the potential solution set of this really critical topic.

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30 Comments

Most of college is a waste. It is a herding device per class stratus. If you go hard science, there is still some worth. But with the Internet if you want to learn a subject you can connect to some briliant minds (teaching skills and/or subject knowledge) for the time you invest. The most important skill is developing critical thinking that allows one to pursue study and learning without concern for herd acceptence. That and how to judge people so you are not swindled.

I look forward to reading your book, Charles. Young people I know are rejecting the traditional mantra in droves, at least the smart ones are. The lemmings have not seen the ROI cliff; however, I hope that will change soon. God help anyone who works in academia when they do.

I've a few relevant life experiences to add to the discussion. Believe it or not, based on the strength of my verbals on my SATs in 1973 I was offered a full scholarship to Southampton College, if I majored in English - and I turned it down. The reason I gave that people understod was that the college was "not acredited" (They became acredited later.) My real reason was that graduates in that field tended to not make very much money IF they could find a job at all. I tried to get a degree in a field with a shortage--nursing--but had to quit due to a family emergency after only one year. I took me three years to pay off that one year of schooling.

Fast forward to 20 years later.... My ex abandoned me with three kids, and I spent a great deal of thought on how to support the kids. I 'd watched my generation train for careers that never materialized (examples: physics grads I knew working as courriers or rousastabouts--no physics jobs--and the country had way more teachers than teaching openings) so my main concern was cost-effective training that would lead to an actual JOB. I tried to choose an occupation that would not become automated and I focused on careers where there was a shortage of applicants. If no one wanted to do it, but it was necessary and I could manage it, those were my best options. I chose heavy construction safety management and got licensed in that for the City of New York. Licensing would have cost me $3K for a 40-hour course and $1K for testing and applications and such, but my new boss paid - the need for people in my field was that great.

But what I had not reckoned with was similar to what Adam described as:

what that piece of paper does, that diploma does for you is, it gets you in the door in terms of the interview process during the initial recruiting phase right after graduation.

I only made a living wage when I went back to school and got a bachelor's degree in safety management, and then threatened to leave unless they paid me what that was worth. So while I am a firm believer in professional licenses as an alternative to degrees I ran into that "you currently have to do both the practical training AND the degree" situation. School plus a job plus sinlge-parenthood = exhaustion. God, I hope the system Charles Hugh Smith outlines hapens soon! But there is something else getting in the way.

I think that hiring officials look at a degree as a way to cover their "accessories" - as in, "Hey, how was I supposed to now s/he would not work out? They had a degree!" Until human resources-types stop looking at traditional degrees like insurnace policies to keep hiring officials out of trouble if they make a mistake, this factory-degree farce will continue.

Not that anyone will hire me at my age (50s) and my old profession is gone with the rest of the construction industry. So I looked to the future, and people need to grow more of their own food. I will help them do that as a consultant. Entrepreneurship can be mentored via SCORE. Right now I am taking an MOOC via Clemson University to get a Master Gardener certificate; the title "Master Gardener" requires volunteer hands-on work, once a year. Cost? $300. And I am getting a certificate, not a degree, in Landscape Design and Horticulture from a local technical school for around $1500, in $169-per-class increments. The cost-benefit ration for my chosen path made a heck of a lot more sense to me than going back to a traditional college and going in debt up to my eyballs.

Great topic and discussion! As both a parent staring down the gun of my daughter's high-priced educational ambitions, and a university professor somewhat affiliated with the current system, I am very interested in the issues that you raised and the potential solutions you've described.

One concern I have though is the relative weighting of roles and responsibilities of any educational system versus that of the students themselves. We are treating education as if it were a product. The idea is that if you go into a school and do the time, jump through the hoops, and pay the bills, that the paper degree that is collected on the other side means that the person who comes out is a 'finished product' (engineer, architect, teacher....), with the academic pedigree telling an employer if they are getting a high quality asset or a cheap knock off. However, the real point of an education is to come out at the other end with a mental toolkit that you are skilled in employing on 'real world' problems. Without the marriage of both academic learning and effective workplace internships, the likelihood of gaining any level of 'mastery' is quite small.

The study that you mentioned, assessing changes in the levels of critical thinking skills engendered by a generic college education caught my attention - with 2/3 showing little or no improvement! Is this a failure of the educational system, societal values, or human nature? Is the quality of education dropping or are the expectations of ill-prepared or incapable students increasing? I teach graduate school and one of my stock statements at the beginning of each semester's courses is "I may not be able to make you think, but I can sure try, and I will". I truly have no idea of what percentage of the human population is capable of different levels of critical thinking but I do know that for my own doctoral and master's students that each one needs hand-crafting since each is limited by their own unique set of mental/psychological challenges. I am not sure that factory education procedures (either online or in person) are capable of turning out critical thinkers.

I really like the idea of accrediting the students versus simply relying on the sheepskin from academic institutions as proof of ability because it rewards proven proficiency regardless of where or how the knowledge has been gained. Excellent universities would still have a powerful role because they would be able to guarantee a much higher chance of a person passing such a test, assuming successful completion of their programs. Those students motivated and capable enough to independently gain the requisite knowledge and skills by dint of hard work, experience, and tenacity could do so without incurring large debts, perhaps via free online courses. Ultimately though, this again comes down to proving ones ability to take a test, not to being able to function in the real professional world.

It is clear that the educational system, just like all human-related activities, has to continue to evolve. However, I do not believe that universities manufacture a scarcity of reasonably accredited students. If anything, they (at least some) try to mass produce them. The problems we face seem to be more related to the lowering of standards than the holding back of eager minds.

Great food for thought, and there is certainly an expanding role for the approaches that you outline.

This is going to make me sound like a left wing touchy-feely ideologue. I am not. I am to the right of Genghis Khan. Why? Because nature uses only one criteria. “Does it work?” No excuses, “Does it Work?”

Here goes: The basic unit is not the individual. (Sorry lone heroic cowboy with horse.) It is the planet itself. And from there on we can divide everything down into all sorts of subgroups, all completely arbitrary and artificial. (Chinese versus American, Whales versus plankton etc.)

The Ego riddled, Model Making Left Brain needs a re-boot. It is too late in the day for any pretence that we can use Left Brain thinking to solve the errors of Left Brain thinking. It needs a complete re-boot. For most that means pharmacopeia. Fortunately we come armed.

Back to the Western Education system.

“Does it Work?” It works to ensure that some people do not have to polish cement, or whatever it is that people do out there in the Real World.

Notes:

Google is now in control of Accreditation

Please contemplate Guilds

My education started after I left school when I bought my first calculator, thus freeing me to fall in love with Mathematics.

Philosophy is a Dirty Business.

In India a computer was offered to the kids by putting it in a hole in the wall. They educated themselves.

In the 1940’s & 50’s, a high school diploma was a ticket to the middle class; college had its place for education for some jobs, but was not necessary for prosperous middle class life.

From about the 1970’s on up, a college degree was a ticket to the middle class.

For the past ten years and into the future, a college degree is a really expensive raffle ticket to the middle class.

A college degree in many ways has very little to do with education, it is much more about class distinction in our society, and how much an employer is expected to pay for your skills. As you all are well aware, you can expect far less pay for a job if you do not have a college degree; even if you have the same skill level.

Here’s the present dilemma,

Get the college raffle ticket to the middle class for as little expense as possible. This is getting really really hard to do.

And get some real skills as well despite sinking years into a college education.

As a father of four children, 10 to 1, I need to help my children run this gambit. It is nice to have some more insights on this.

One absolute key to a real education is the master-apprentice idea. I am very glad this was brought up. In my experience, this is where most skills of value are disseminated.

I have just started taking MOOCs and I'm having a great time with them--two sustainability classes, one climate change, two history, one Gastronomy. Of course I'm not 18 years old and I have spent a lifetime in the classroom. Here are some thoughts about them--

They are a very good replacement for lecture classes--you can watch the video as many times as you want, you can add closed captions, you can download it to your computer, and you can download just the teacher's powerpoint.

Activities can be created that are mainly done on forums with no imput from the professor---all student discussion

The star students are not university students, but graduates with experience in the workplace, which could intimidate a teenager

The classes are huge---there are 30,000 in my history class--and most of them are from outside the U.S. Some barely have access to a computer. Some barely speak English.

The dropout rate is very high. You don't pay for the class, and no one cares if you quit.

Many of the courses are taught at a very high level even though they are introduknoctory classes.

It takes a lot of persistance and self confidence to keep going. You have to be willing to stretch out of your comfort zone sometimes.

The classes are still experimental and both professors and students are guinea pigs.

I do not think that MOOCs can take the place of an intimate classroom where the teacher works closely with the students, nurtures their creativity, sharpens their creative thinking, and inspires them to be life long learners, That is not magic. That is hard work.

When I was still working, I taught myself advanced programming largely through google searches.

I've used google searches and YouTube videos to learn how to replace the crankshaft on a lawn mower and modify a DSLR camera to take long exposure pictures of nebulas among many other useful and entertaining tasks.

If you want to do something, there is almost always someone who has posted a video and or step by step instructions on the net. I sure hope we don't loose it.

But you are talking about people becoming inner driven and motivated vs being herded. Don't know how well that will work.

The emerging model that Charles described, or at least that I picked up on, of a combination of apprenticeship and on line lectures from the best minds around sounds like a wonderful model. As an aside, I am in the Architecture business and have had many wranglings with the accreditation process which I will not go into. Most students that we see straight out of school are close to completely useless. And actually, typically those from Ivy League schools are the most useless of the lot. Some in our firm simply refuse to hire Graduates from one ot the most prestigious Ivy League schools aournd that is close to our office unless the individual interviewed presents very a compelling reason to make an exception. Those schools that have coop programs typically produce students with a much better education.

I think Charles view of education is an extension of the “factory” system is a very good one. The factory model has become part of our cultural milieu and structure that needs to be challenged at every level. It has invaded every level of our thinking and it is going to take some time to root out.

I think that the most difficult one to root out and have a nuanced discussion about is that subject of automation, which is still presumed to be a given as humanity continues to evolve. Anyone who challenges that world view is labeled as unrealistic, neo-luddite, or someone simply overwhelmed with an overly romantic view of the past. I think that this is tied to our factory thinking and educational system and the presumed and unexamined assumption of efficiencies of scale.

The foundation of this flaw is our factory produced educational prejudice that efficiencies should only measure the speed at which something can be produced and the consequential reduction in human labour. Always missing from this analysis are societal and externalized costs associated with the process. The small, local and self sufficient are dismissed as unimportant and inconsequential. A Guy riding around in air conditioned gps guided combine harvesting thousands of acres of GMO corn, now thats where it is at, technology and progress. If you don't believe in this, you believe in mass starvation because some ridiculous romantic view of the past.

In fact, the opposite is true. Factory farming it the most inefficient destructive form of agriculture that the planet has ever seen, and it is responsible for most of the hunger in the world, if you measure all the benefits and impacts together as a whole. If our view of automation does not become more holistic and comprehensive our ability to transition to a humane and sustainable world will be much diminished. This is in no way to say that all automation is bad, but without a rational method for selective adoption, we will continue to be in real peril.

The infrastructure, economic and political forces that favor power and wealth concentrating systems of the factory mentality will not pass willingly both in the educational system and the broader economy. The inovators amoung us (which is all of us) must fight on a daily basis to create an alternative economy both within and without the system. Challenging the educational system is a great start, thanks Charles.

I would think that if I had a child who was a mediocre student who wanted to go to a party school I would be very worried. Saving huge amounts for your child's education, so he will go to college and be sucessful will very soon be considered a waste of time and money.

I think MOOCs will soon pay for themselves by charging a nominal fee. The kinks will be worked out--cheating will be avoided and real credits can be awarded that will be universally accepted. Then students around the world will have a level playing field with party boy.

Those MOOCs can be completed anywhere there is ain internet connection--- a prison library, a hospital room, a town far away from university resources--and can be worked on 24/7 so a student can also have a full time job or study in the middle of the night.

The participating colleges at Coursera and EdX know that this is coming and there is no way to stop it, so they are working to develop the best models they can. They are suggesting that in the future, that four year college program will only be on site for a part of the sudent's degree program--perhaps two years of MOOCs before finishing at the college campus.

I always enjoy CHS's writing, but this is one subject that is much more complex than this podcast. Charles, I wonder if you have teaching or administrative experience in higher ed? I'm only asking because I have no idea, but it would put some of your ideas in context. I find many of you assumptions being made as someone that is strictly looking at it from the outside, especially in regard to education's relationship to the market, but I may be wrong (I don't know).

I respectfully disagree that education is disconnected from the market. I think it is absolutely connected to the market, actually, in my opinion it is too connected to the market. We have huge distortions and dislocations in the market...extraction of wealth, huge debt, efficiency and profit above all else, information is more important than context, marketing is the means of dissemination, etc, etc. The market has applied its pressure on to higher ed, and therefore it is merely a reflection of the economy. Why not just call it what it is...universities are big businesses in the business of education. I know your heart is in the right place, but if education begins with the question of ROI, then we will never break out of the cycle that is bothersome to you. Many of the assumptions and questions you raise can be asked differently or in reverse. For instance:

Is higher education merely for the purpose of getting a job?

In an economy that requires specialization/credentials as a means of creating scarcity (providing income for those to live) and for its ever increasing complexity, why would you expect universities to begin to do away with these credentials? I can only see more specialization coming, not less. I don't disagree with what you would like to see, I just don't see the market allowing that to happen, and nor do I see decisions in higher reflecting this.

MOOC courses are in their infancy and are quickly being manipulated to serve bigger institutions with more money, not smaller ones. Who makes the decision as to who the "best" teacher is to teach the MOOCs? Do these MOOC courses really create the "best" learning environment? How can students have a meaningful in-class dialogue in MOOCs? Could it possibly be that more teachers (good and bad) teaching a subject in smaller classes in real-time, in real life, might actually be a better learning environment, with more context, more chances for critical thinking, and relationship building? How much human embodied learning is lost in a "screen" based learning environment? Do we have any data on that? Where would you begin?

Where are the arts and humanities in this discussion? (okay there was a tiny bit discussed) Is it only about science and technology? Isn't this line of thinking that has brought us to this point? I'm all for entreprenuerial/individualized mentoring as you discuss, but it is only a miniscule portion of our economy now.

Instead of asking the question "why is a $100k education basically free on-line?" why not ask "why is the price tag for a university education $100k? or better yet, why is it being given away for free on-line?

Most students, if they are filling out financial aid, are not walking away with a $100k bill at the end, the majority are owing considerably less.

Were people a hundred years ago that stupid? If not, then what does this "data/fact" really tell us?

You mention the ratio of administrators to faculty. You are correct...budgets have risen in higher ed and much of the income that was paid to full-time tenured/tenure track faculty has shifted to bloated administrative salaries. Isn't this again modeled after the corporate compensation model? Why would we expect large universities to change their structure if the market will not? Won't MOOC courses only concentrate the product/information in fewer hands in the end, and cause even more disparity in this sector? Won't those that disseminate the courses and the medium over which it is distributed control the product?

Open source models in reality are a mixed bag. The music industry has been devastated by free music in a format that is far worse than what we listened to 30 years ago (mp3 compared to vinyl). The quality has gone down. Now the sharing movies/videos is laying waste to the film industry, albeit, Youtube is making a fortune off this, but how many have lost entire income streams because of this shift? Speaking of which, where are the other Youtubes? Where are the other Googles? Is this competition?...yet we all support them daily?

As a test, Charles would you be willing to give your book away for free? Seriously, would you be willing to just put it online today and give it away for free? If we are going to discuss this topic in depth, you need to answer these types of questions first.

As you can see I'm pretty passionate about this. I very much appreciate your work CHS (and Adam's). You are a deep thinker and tackle some of our most profound subjects on this site. There are things that you discuss that I agree with, but this is a very complex issue that can't be just looked at in respect to ROI.

What kind of human beings do we want in our communities, and how do we educate them to achieve this goal? Is it aligning education to the market, or is it aligning the market to what is in our hearts? When you point to yourself with your finger, do you point to your head or to your heart?

I know both your hearts are in the right place so let's open up this discussion wide! Thank you for getting it started.

"Morphic resonance has many implications for the understanding of human learning, including the acquisition of languages. Through the collective memory on which individuals draw, and to which they contribute, it should in general be easier to learn what others have learned before.

This idea fits well with the observations of linguists such as Noam Chomsky, who propose that language learning by young children takes place so rapidly and creatively that it cannot be explained simply in terms of imitation. The structure of language seems to be inherited in some way. In his book The Language Instinct, Steven Pinker gives many examples to support this idea.

One of the few areas in which detailed quantitative data are available over periods of decades is in the scores of IQ tests. If morphic resonance occurs, average performance in IQ tests should be rising not because people are becoming more intelligent but because IQ tests should be getting easier to do as a result of morphic resonance from the millions who have done them before. This effect is now well known and is called the Flynn Effect, after its discoverer, James Flynn.

Large increases in IQ test scores have occurred in many different countries, including the United States, Japan, Britain, France, Germany, and Holland. Many attempts have been made to explain the Flynn Effect, but none have succeeded. Flynn himself describes it as "baffling." But morphic resonance could provide a natural explanation."

Thanks Charles and Adam, for the great discussion, as well as the many interesting data points. $100 billion of student loans owned by the US government in 2009 rising to over $500 billion today. Wow. Last year, in a 12th grade philosophy class, when we were talking about new economic paradigms and investment strategies, I said that I believed that there would be a major decline in the US dollar probably by 2016, but by 2020 at the latest. A very intelligent student asked me about my timing, and I realized that I had no good basis at all for trying to time such a dollar decline, just a vague gut feeling. I told him that, first of all, I couldn't be sure and that I had no statistical or scientific basis for this, in order to be open about the weaknesses of my belief. But I also said also that when exponential systems accelerate, when debt and money creation speeds up even as the exponential increase in oil production flattens into a plateau, that some type of reckoning between unlimited money and scarce resources would be imminent. The ballooning of student loans on the balance sheet of the U.S. government seems to support the idea that we are in some type of financial endgame, as Chris teaches using a number of different data points.

Online learning, broken educational models and the general trend of destruction/decline of white-collar jobs (and job quality) including teaching are all scary topics for a high school social studies teacher, as we are a dime a dozen. That's why the football coach so often also gets the U.S. History teaching position, no denigration of coaches intended.

Wendy's post regarding her own repeated adaptation in the face of a transforming labor market is inspiring, and I also recall her sharing about how she advised her kids to try to find careers that are more likely to be in demand by employers in the future. I am working fairly hard at trying to be an innovative teacher. See here and here for some oil poster projects that my students did*.

On the other hand, the enrollment of our school is loosely following the peak and then steady decline of the global oil production curve, with 2008 being our peak year. If, in 2011, the Swiss National Bank had not intervened and devalued the franc for the first time since the 1970's, our school would have even lower enrollment now. I've been here long enough to not be cut first, but I certainly don't take it for granted that my position could never be eliminated. And just because I try to bring emerging trends and topics into the social studies curriculum doesn't really help, as many administrators see very little difference between a very cookie-cutter U.S or World History course and a (hopefully) more dynamic Comparative Politics or contemporary Issues course.

That suggests to me that I need to invest more social capital here in the small town where I work, and also to get some different certifications, including an English-teaching certification. However, if/when the OECD country economic decline gets more acute, British and American English teachers looking for work abroad will be a dime a dozen. (Actually, they kind of already are...)

We use all sorts of technology when teaching our students here, but I do wonder if I would be better off trying to get some sort of teaching position within an online high school or university. That might be another good route to job security. When our students fail a course here at the school, they are allowed/encouraged to do an online course, usually over the summer. In some cases, it seems highly likely that a wealthy student from some part of the world has hired someone to take the course for him. We don't have any students from Bahrain, so I'll use that as an example, with a wealthy Bahraini student paying his well-educated Pakistani immigrant-teacher back home to do the course for him over the summer. This is one drawback of accepting credits from online degrees, but that doesn't mean that they're not very valuable on many levels.

One final note on preparing our students for the labor force, i.e. reinforcing the connection between universities (and high schools) and the economy: I agree with Adam and Charles that we don't do the best job of this in the U.S. If I had to do it over again, I'd be a doctor, or a nurse, hands down. If I was either of those, I could still do just about everything I love do now and also it would be a lot easier to prepare for a rapidly transforming world. U.S. universities are encouraging/sanctioning too many students to major in humanities, in my opinion, and this comes from someone with an economics undergraduate degree who teaches history and philosophy. Here in Switzerland, the public schools are similar to those in Germany, in that there is a strong emphasis on career tracking and apprenticeship. It's a little brutal for North Americans in some respects: Starting in 5th grade, Swiss students are provisionally divided into one of three tracks. The top track is university bound, the middle track, where the majority of students end up, is bound for some type of technical training, which can range from accounting and business administration to plumbing or carpentry, and the bottom track is basically encouraged to finish school at 16 and then join very basic service-level apprenticeship programs for a life of near-minimum wage unspecialized service work. There is some room to move from one track to another before one reaches 16, but not a lot. This would be very antithetical to our more egalitarian and American-dream culture in the US, I think, but from what little I know about it, it seems that the Swiss and German workforces are much better prepared for hard times than the American workforce. And, most students in that middle track get very valuable apprenticeship experience from ages 16-19, if not longer. This is a much deeper type of practical job training than the entrepreneurship program that CHS talks about in the podcast. I don't want to denigrate the humanities because they're fascinating and very enlightening on many levels, but most technically-trained people who are interested in history, art, politics and literature find a way to pursue these interests as an avocation and still bring home the tofu (or bacon...).

Cheers,

Hugh

*By the way, I am still very interested in feedback and suggestions regarding teaching/exploring much of what we talk about here at PP to/with my students. For my Comparative Government and International Politics class, which is as close as we come to a contemporary issues class at our school, we'll be doing contemporary economics in October and in November, oil resources and biophysical economics, followed by climate change and other destabilizing environmental shifts in November, and we'll cap the semester with a brief look at how these factors may or may not contribute towards a partial (or total) civilizational collapse, based on the criteria for such a collapse put forth by Jared Diamond and Joseph Tainter. If anyone has any input or interest in contributing to these units, please feel free to make suggestions here.

I just reread my post. I apologize for using the word you, as if I'm directing my questions strictly at Charles. I really mean a collective "you" or we, and throw these questions out for everyone.

Ao, interesting read. Thanks for the link. My question is how can we ever come to a complete definition of intellegence in a dynamic society where context is forever changing? This is where I believe Arthur would say we run into the limitations of the left-thinking brain. Lol

My final thought today on this is that our educational system, contrary to opinions, is not broken. It needs help for sure, but let's look at society and the markets first, and then education will follow. Educators, me included, are being forced to create curriculums that industry is demanding of us. I can attest to this with 20 years of teaching experience. In the past four years, I have had to give up a curriculum that I designed (which in my opinion had much more depth) for one that was considered more "marketable" (much less depth). If I had tried to continue with my curriculum, it would have meant losing my job.

My final thought today on this is that our educational system, contrary to opinions, is not broken. It needs help for sure, but let's look at society and the markets first, and then education will follow. Educators, me included, are being forced to create curriculums that industry is demanding of us. I can attest to this with 20 years of teaching experience. In the past four years, I have had to give up a curriculum that I designed (which in my opinion had much more depth) for one that was considered more "marketable" (much less depth). If I had tried to continue with my curriculum, it would have meant losing my job.

I would say that the educational system is not broken and is doing exactly what is intended IF you are the one directing the system. Witness such ideas as Chicago math (courtesy of the University of Chicago) and especially, how the Rockefeller Foundation influences education. John D. Rockefeller founded the University of Chicago. Little wonder he described the donation as “the best investment I ever made.” Little wonder that he made the following statement.

"I don't want a nation of thinkers, I want a nation of workers." John D. Rockefeller

If you are the average middle class person who is supposed to be the beneficiary of the educational system, then I would say for you, yes, by and large, the system is broken. I can't help but think of this oft posted video clip. This man is more and more appearing as a prophet.

I agree with Gillbilly and the importance of asking the right question, i.e.,Is higher education merely for the purpose of getting a job? Emerson's many essays but especially the one on self Reliance spells out clearly that a true education is to develop a seeking mind, one's moral imagination, and capacity for civic engagement . Education in techniques, technology and entrepreneurship will not suffice. The spread between the rich and the poor widens daily, our freedom and democratic form of government is under seige by corporatism, and death of the mind by an excess of entertainment is well underway.

Someone once said our goverment was invented by genuises to be run by idiots. But now the tryants are taking over and the average citizen doesn't know enough to give a damn..

You can argue until the cows come home regarding other issues and still the tuition inflation shows that a critical problem exists. If the debt bubble wasn't going to bring us down faster, then medical care costs would bring us down a few years further down the road. The chart indicates that tuition inflation is even more out of control than health care costs.

Uncontrolled inflation in an industry is a sure sign of a critical disconnect. There are a variety of reasons this can happen, such as government involvement, industry size, competitive environment, to name a few.

it would be interesting to see the tuition inflation of medical schools and major universities separated from the rest.

The likely answer down the road is smaller, independent universities. From what I've read, the end of cheap energy will force downsizing across the board.

How we are talking about technological ways of changing education when we haven't...

-changed the mindset behind the system that spawned this crappy educational paradigm.

-found a totally renewable, environmentally-friendly, cheap energy source to run the electronics we'd be basing this entire new educational framework upon. What good will online learning be when we run out of cheaper energy and can't power our devices?

-found renewable sources of the materials that go into building a lot of our fancy tech toys. Rare earths are called such for a reason.

Don't get me wrong, I love the ideas espoused in this podcast, and if implemented they would dramatically alter education. But when Chris says the next 20 years will be radically different from the last 20 years I don't think educational paradigm is what he was referring to. Maybe had we implemented such a radical idea as "critical thinking" into our schools thirty years ago we'd be in a much better place today, but I don't know about it now.

I'm going to take the liberty of sharing my recent presentation to the Inland Northwest Permaculture Convergence since it is germaine to this conversation:

Since discovering the Ecological Predicament over 20 years ago, I have read hundreds of books on the topic. Like almost all of those who take the time to study the predicament, I quickly moved from what to why to what to do....

As Chris Martenson elaborates coherently in his Crash Course, this exponential growth is not sustainable. The bottom line is that eventually your pension/retirement fund will be worthless as most investment values have exponential growth built into the valuation.

Why has society let this happen? Lots of reasons. Some of the best explanations, in my opinion, can be found by studying the work of Ken Wilber and others in the field of Integral Theory. It's easy to get hung up in the fascinating "why" material.

As pointed out by Joseph Tainter in this article: "The scenarios [for the success or failure of any problem solving system] are collapse; resiliency and recovery through simpliﬁcation; and sustainable problem solving based on increasing complexity subsidized by new resources." Please note that the latter action has resulted in the collapse that is already well under way. Therefore, the middle way -- resiliency and recovery... -- would seem to be the prudent way forward. Tainter indicates in the article that this has rarely occurred throughout history. (Please note the Productivity graphs on page 95 of the article.)

Since time is of the essence, we'll not focus on the Why for now.

What-To-Do﻿﻿

When society requires to be rebuilt, there is no use in attempting to build it on the old plan. --John Stuart Mill as quoted in Plato's Revenge.

This book [Plato's Revenge] should encourage...attempts to rethink how present and future societies might be organized given the array of environmental and sustainability issues that we face. --Robert Paehlke, Professor Emeritus of Environmental and Resource Studies, Trent University

﻿I confess I am not charmed with the ideal of life held out by those who think that the normal state of human beings is that of struggling to get on; that the trampling, crushing, elbowing, and treading on each other's heels, which form the existing type of social life, are the most desirable lot of human kind.... -- John Stuart Mill,1848

A word about ethics. I am of the same mind as Alfred North Whitehead (as interpreted by Brian Henning in The Ethics of Creativity):

1. the obligation always to act in such a way as to bring about the greatest possible universe of beauty, value, and importance that in each situation is possible (beauty);

2. the obligation to maximize the intensity and harmony of one's own experience (self-respect);

3. the obligation to maximize the harmony and intensity of experience of everything within one's sphere of influence (love);

4. the obligation to avoid the destruction (or maiming) of any actual occasion, nexus, or society, unless not doing so threatens the achievement of the greatest harmony and intensity that in each situation is possible (peace);

5. the obligation to strive continually to expand the depth and breadth of one's aesthetic horizons (education). [p.145-146]

This is one reason why my wife and I have an ecological footprint that is 10%-15% of the national average. However, we could, under the right circumstances, improve our quality of life substantially without expanding our footprint. An integral campus is the answer for us.

What is an integral campus?

The nature of towns and cities with their property lines and bureaucracies makes it difficult to organize a comprehensive environment for maximizing quality of life, self-sufficiency, security, happiness, etc. The dominating influence of the automobile will make towns and cities difficult places for rapid change in the future. (I applaud all of those who are giving it their best shot.) Just getting rid of the cars will be a challenge, although I suppose that the tops can be cut off and the remainder used as large planter boxes. I have seen someone use their car as a large fruit/produce drying device.

Most ways of life -- even though based on Permaculture principles -- will not provide security. For example, isolated farms will be vulnerable to those roving the countryside for food once the supermarket supply chains grind to a halt in a post-peak oil world. In addition, self-sufficiency will be messy and inefficient in most communities and impossible on isolated properties due to lack of labor and equipment.

Universities and colleges, regardless of what slogans they put on banners and their homepage, are simply training individuals to participate in the consumption economy. If they were truly universities, they would be focusing most of their time and energy on the Ecological Predicament.

The goal would be to develop an infrastructure and organization that can be mostly self-sufficient as well as secure by design. It is interesting to note that Cambridge and Oxford quadrangles were designed for security when built in the Middle Ages.

An integral campus would operate as a spa and retreat. Initially, similar to the properties linked to in the following paragraph, guests would likely stay a week or a few days. Eventually, the length of stay could transition to full-time residential with the option to spend time at all integral campuses. The property would be operated by students who are committed to living lightly on the earth. In return for their work, they would receive the equivalent of a university education with the opportunity to master a hands-on livelihood such as gardening, cooking, and/or winemaking in a permaculture setting. Those interested in life-long learning/teaching and the ethics of sustainability could remain in the system rather than go work in the wacky world.

There are a handful of places that provide glimpses of what I am talking about when I say integral campus. Esalen, Tassajara, and Rancho La Puerta come to mind.

Investors would have the option of receiving a dividend or staying at the property as a guest. It may be that a significant portion of start-up capital would come from wealthy patrons who are interested in being involved with the creation of a sustainable institution.

Subject to spending at least three consecutive months in residence at one location, teachers/students would have the opportunity to move to other campuses if they get the nomadic urge.

Eventually, all the services necessary for a healthy life would be brought inside the institution. It might start with a dentist who enjoys gardening and wants to live sustainably. Over time, all services could be included -- including hospitals. Ambitious? Yes. Necessary? Yes.

Access is the key and the wealthy have provided examples with private golf clubs and vacation home clubs. While property rights are private, access is fluid and there is an incentive to preserve the asset.

Where

One place that comes to mind is the Mukogawa Fort Wright Institute (MFWI) on the outskirts of Spokane, Washington. The student body is Japanese and the economy in Japan has suffered for 20 plus years. It is a possibility that it will be difficult to keep the doors open in the future. MFWI is adjacent to Spokane Falls Community College which provides expansion possibilities once the education bubble pops.

A free world-class education for anyone anywhere.

Khan Academy is an organization on a mission. We're a not-for-profit with the goal of changing education for the better by providing a free world-class education for anyone anywhere.

All of the site's resources are available to anyone. It doesn't matter if you are a student, teacher, home-schooler, principal, adult returning to the classroom after 20 years, or a friendly alien just trying to get a leg up in earthly biology. Khan Academy's materials and resources are available to you completely free of charge.

I guess the question begs: Whats more important for kids to learn? The internet or a classroom and a teacher.

based on my experience, there was literally nothing i couldnt of gotten from the internet (had it been available)although i just never required or asked for help, not to say that everyone would be that way.

if we skip over the (now largely useless) memorization of facts component, i actually believe that educationally focused and designed games would probabaly make the best learning tools. Games by their very nature are oriented for stepwise advancement and problem solving. Focused on basic skills and critical thinking of course, not memory.

Im sure many would disagree but i see little need for classrooms and teachers in the conventional sense. Kids could still get help online and they have plenty of other activities to socialize with.

Wow! What an incredibile number of comments. I gave up reading them all so I hope I'm not repeating things others said. While I agree that we may be in a transition stage between high-priced universities and some sort of free or semi-free online and more focused educational system, I have questions about it.

Testing as a way of verifying someone's skills.
Not everyone does well on tests. In fact some very intelligent/creative people fail tests. What will happen to them in the new system?

What about laboratores. You can't even do undergraduate biology without a wet lab experience. Same for chemistry and physics. How can a MOOC that has no physical campus deal with that?

There's no free lunch. Someone, somewhere, somehow pays for those MOOCs, and even Khan Academy. You either pay them directly or you have to put up with ads or you have to put up with their point of view (i.e. propaganda) or something. If the high end universities that support the MOOCs fall on hard times the MOOCs will disappear.

What about 'breadth' requirements? Many people wish they didn't have to take things like ethnic studies, or an art class, or learn a language. But to their credit (IMHO) universities have decided that those kinds of classes produce more well-reounded individuals who are hopefully more compassionate, more involved in the political process, and can see beyond the confines of their social class. Will MOOCs support that?

Could you really become a doctor or lawyer or engineer entirely from online MOOC classes? I doubt it.

My 18 year old son is a senior in high school. I'm outraged at the high prices of colleges. How could they have gone up 1000% since I went to college? My salary hasn't gone up that much. And the FAFSA calculation of parents' contribution is a joke. It doesn't take into account one's age, how much one has (or hasn't) in retirement, whether they're supporting aging parent, etc.

I agree that it's a cartel system and the government colludes with it because they make a buck. The student loans are as much about creating a new income source for out bankrupt country as they are about helping student go to college. What would you expect if you have the same amount of goods and you massively increase the supply of money available to pay for it? The price goes up of course.

For those with children close to going to college I highly recommend the book Debt-Free U by Zach Bissonette. Lots of straegies for avoiding student loans.

See youtube, there is an excellent documentary called The College Conspiracy that is well worth a look and answers so many things. While government interfere with natural learning then we will NOT see genius or freedom of independent thought appear.

How many times I've heard on this site there is no free lunch, and yet, now we all want or believe we can have free education? There is a huge difference between information and education. We have information like never before, but we are struggling to educate our students, at least according to our test scores. In my opinion, out of all the posts on this thread Arthur's post is the most relevant to this topic. The sum of the parts is lost, we only see the parts. The freeness of Khan, or any other institution proclaiming free education, is an illusion. Khan is an institution, and like all institutions, the shadow side of all institutions is self-interest.

We live in an age of ever increasing categorization and specialization, but have lost complete sight of the whole. We talk of the mind and energy as if they were things to take apart and put back together, as opposed to what they really are, potential transformation. We talk of of energy as if it is some "thing" to be acquired to maintain our life. The energy on which we should be focusing our attention is what Treebeard writes about, our ability to transform ourselves. Now that is energy! With that attention we may actually be able to save our lives.

The divisions of subjects/disciplines don't exist in the world, they are only divided and categorized by our consciousness. There is only one subject in the world, all the disciplines are just illusions we have created in our minds.

Charles Hugh Smith said it all with his article title - the Nearly Free University. I'd be really, really worried about my job if I taught in a college nowadays: the model is unsustainable, and online courses are getting better and better.

There would have to bee a few teacher and administrator fees, but the overall cost the the school for running online classes is much cheaper. My daughter-in-law has $45K in student loans. If it were $4,500 I would call it "nearly free" in comparison.

Charles Hugh Smith said it all with his article title - the Nearly Free University. I'd be really, really worried about my job if I taught in a college nowadays: the model is unsustainable, and online courses are getting better and better.

There would have to bee a few teacher and administrator fees, but the overall cost the the school for running online classes is much cheaper. My daughter-in-law has $45K in student loans. If it were $4,500 I would call it "nearly free" in comparison.

I understand your line of thinking and CHS's, but I would like to respectfully point out a few things. I agree, those who teach college full-time should be worried, but 70 - 75% of higher ed teachers are part-time, most having no benefits, so there's not that many left that have to worry. Kind of makes you wonder where all that tuition is going? I also agree that the nearly free education is much cheaper, and therefore you receive a much "cheaper" education (especially when moving from three dimension to two/flattening context, and from synchronous to asynchronous/distorting time). I also agree with Ao that those in charge of education ARE getting exactly what they want... which is more and more students taking on-line courses. This is what they want. Kind of makes you wonder why?

As Google continues to digitize all our books, we can continue to get rid of all our real books and go completely virtual (as some schools are doing), leaving the dissemination of those books in the hands of those who own the infrastructure/networks. Kind of makes you wonder why? As education becomes nearly free for all (like healthcare through Obamacare right?) then the credentials you just gained for your new line of work, not to mention most professions, will become superfluous, and you will need to look for a new line of work.

I also agree that the model is unsustainable for many of the same reasons that our entire system is unsustainable, but what looks like the cheap answer, may be in fact just that, the cheap answer. I really respect CHS and his writing and I will take the time to read his book, but he has not said it "all" in respect to the subject of education. It is like all things, a very complex subject with pressures bearing down on all sides. He, like all of us, is but one person expressing his perspective. The idea of free, or nearly free, education for all is a noble one, as is free or nearly free healthcare for all. If we ask Ao if healthcare should be free or nearly free, what do you think his response will be? Our responses come from our respective experience and our place within society (his being in healthcare). Therefore, if you don't work in academia, it may seem very straight-forward looking at the system from the outside. That view is important, but just as important is the view from the inside.